Twin crises will help Asian debt funds thrive 26 May 2022 Covid-19 and war in Ukraine are curbing the risk appetite of banks that already neglect all but the region’s best borrowers. The situation opens the door for funds like KKR’s new one. A pan-regional approach also learns from previous missteps in India.
JPMorgan and its customers deserve more credit 23 May 2022 The U.S. lender may hit a profit target it thought it might miss, partly because households remain flush. That matters, because souping up the consumer bank is one reason for the lender’s big investment plans. The idea that Americans are holding up should help rivals too.
Crypto’s day of reckoning, Goldman holiday perks 19 May 2022 Terra unravelled while $75 bln Tether wobbled. In this Viewsroom podcast, Breakingviews columnists discuss why reforming stablecoins which are supposedly linked to the dollar could dent their allure. Also, the Wall Street firm’s vacation offering is unlikely to benefit staff.
Being Jamie Dimon just became less fun 17 May 2022 Over two-thirds of JPMorgan investors rejected the CEO’s pay package, the worst rebuke at a big U.S. bank in a decade. That won’t hit Dimon in the wallet, and there’s no sign shareholders want him gone. But his bully pulpit, like his bank, is smaller than it was a year ago.
Unlimited vacation is a classic Goldman trade 17 May 2022 Goldman’s offer of unchecked time off for senior partners, and more vacation days for the rest, has some sincere aspects. But employees will still have strong incentives to work as hard as possible, and harder. As a rule, Goldman rarely ends up on the wrong end of a transaction.
Elon Musk’s Twitter funds, Netflix with ads 28 Apr 2022 Tesla’s boss is close to clinching control of the social network, having secured financing from Wall Street. Breakingviews columnists discuss why the bet makes sense for banks in this Viewsroom podcast. Also, the streaming service’s subscriber pain may lead to bountiful change.
Deutsche can leave Credit Suisse in the dust 27 Apr 2022 Europe’s erstwhile bank basket case is now valued by investors on the same multiple of book value as the Swiss wealth manager. Rate hikes and a debt-trading boom will play to its strengths. Meanwhile, Credit Suisse’s weak capital ratio and slow growth will keep its shares gloomy.
Nomura’s malaise comes with dark silver lining 26 Apr 2022 More losses on old mistakes helped drag return on equity down to a dismal 4.3% in the last quarter. But they look almost over, the investment bank is holding up, and shares are outperforming fellow Archegos victim Credit Suisse. Retail pain shows there’s much work ahead.
What is Morgan Stanley smoking in Twitter LBO? 25 Apr 2022 The bank is leading a $13 bln debt package for Elon Musk’s buyout and lending $12.5 bln against his Tesla stock. Interest will eat up the social network’s cash flow and Musk may undermine its revenue. A good relationship with the world’s richest man may justify the risk, though.
Musk Twitter bid becomes less virtual, more risky 21 Apr 2022 The Tesla CEO says he’ll put up almost half the $46.5 bln needed to buy the social network and borrow $13 bln against his stock in the carmaker. Banks will lend $13 bln. If all goes well, he makes a private equity-style return. Twitter’s poor cash flow means lots could go wrong.
Bank of America deserves its moment in the sun 18 Apr 2022 The second-largest U.S. lender took less of a hit than its peers amid a rough first quarter. With interest rates rising, investment banking on the wane and its house in order, BofA is in a sweet spot, even relative to JPMorgan. Boss Brian Moynihan can enjoy it while it lasts.
Goldman can close valuation gap on Morgan Stanley 14 Apr 2022 The bank run by David Solomon is worth 40% less than James Gorman’s group, based on multiples of tangible book value. Before the pandemic the discount was 20%. Morgan Stanley’s earnings are steadier, but its rating is rich. If Goldman keeps a lid on costs, the divide will narrow.
Capital Calls: Dubai listings, Epic Games 12 Apr 2022 Concise views on global finance: State-owned utility DEWA defies the global IPO gloom as its shares jump 20% on their debut; Sony is pumping another $1 bln into privately held metaverse evangelist Epic Games at an epic $32 bln valuation.
Ex-Goldman conviction is partial justice for 1MDB 8 Apr 2022 A U.S. jury found Roger Ng guilty of corruption linked to the Malaysian fund. His ex-boss who helped organize the scheme may get a lesser penalty for cooperating with prosecutors; the Wall Street firm got off with a $5 bln fine. It’s an imperfect deterrent for future miscreants.
Private equity can pull away from Wall Street 1 Apr 2022 Sponsors like Thoma Bravo are perfecting a playbook that demotes banks by tapping direct lenders for financing and sourcing transactions directly, bypassing auctions. Banks make a chunk of their annual fees from the buyout business. This threatens that pot.
SPACs’ problems are bigger than the government 30 Mar 2022 The SEC wants to clamp down on blank-check firms’ rosy projections when touting deals. But the headiest days of the party are already over: Activity is down, broken deals are up, and big names have run aground. No matter what, SPACs will have a harder time from here on out.
Capital Calls: Singapore gets D.C. top treatment 29 Mar 2022 Concise views on global finance: A grateful President Biden is hosting the city-state’s prime minister, who backed sanctions against Russia in rare move.
M&A honchos try U.S. trustbusters in absentia 18 Mar 2022 A big risk to deals is regulatory pushback, and that starts with FTC chief Lina Khan. Top advisers at a New Orleans confab are attacking what they call “bias.” There are broader headwinds, too. But in reality mergers are mostly experiencing rational checks and balances.
M&A bankers, like cockroaches, survive everything 17 Mar 2022 Two years ago, top consiglieri convened in New Orleans days before global lockdown. The pandemic in the end didn’t dent business. This week’s convention, the first in person since then, comes with the backdrop of war in Europe. Bankers still have ways to keep the deals coming.
Goldman learns Russian for “reputational risk” 10 Mar 2022 The Wall Street firm is the first in its peer group to say it’s winding down in Russia, after an exodus of staff and curbs on the country’s financial activities. Others may follow to avoid brand damage. For Goldman, it also partly atones for poor Russian timing in the past.